Applicants wait to meet potential employers at a Manhattan job fair in New York City (AFP Photo / Mario Tama) / AFP

Global unemployment is at a record high in the wake of the financial crisis, says a UN report. A rise in joblessness of 5.1 million is expected in 2013, impacting the world’s youth hardest in a climate of stifling austerity and economic instability.

UN agency, the International Labor Organization (ILO) released its annual report on worldwide employment on Tuesday, marking a significant worsening in unemployment trends.

The report states that approximately 197 million people were out of work in 2012, a rise of 4.2 million. Guy Ryder, director-general of the ILO, stated at the press conference accompanying the release of the report that “inadequacy of policy to counter” unemployment was largely to blame for the slump in investment and hiring.

“This has prolonged the labor market slump in many countries, lowering job creation and increasing unemployment duration even in some countries that previously had low unemployment and dynamic labor markets,” he added.

Ryder stressed the numbers did not convey the full extent of the crisis because "labor force participation has fallen dramatically…masking the true extent of the jobs crisis."

Over 39 million people dropped out of the global job market last year because of the increasingly bleak outlook. The economic climate in the eurozone has been earmarked as one of the worst areas for the job market, indicative of a “piecemeal approach” to the crisis.

“The global nature of the crisis means countries cannot resolve its impact individually and with domestic measures only,” he declared.

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‘Global youth missing out on vital skills’

The document reported that young people are worst-hit by soaring unemployment and are losing valuable experience as a result of difficulties in getting onto the employment ladder in the first place.

"The crisis has dramatically diminished the labor market prospects for young people, as many experience long-term unemployment right from the start of their labor market entry," the UN agency said, stressing that such a phenomenon had not been witnessed during previous downturns.

At present there are around 73.8 million people aged between 15 and 24 out of work worldwide and “the slowdown in economic activity is likely to push another half million into unemployment by 2014."

The ILO signaled that, perhaps most worrying of all, in advanced economies around 35 per cent of unemployed young people had been jobless for more than six months. This extended period of time out of work has a detrimental impact on their future career prospects, depriving them of the necessary skills needed to compete in the job market.“Many of the new jobs require skills that jobseekers do not have,” Mr. Ryder informed.

The ILO signaled that employment prospects varied from region to region, emphasizing that Eastern Europe, East and South-East Asia and the Middle East would see youth joblessness on the rise in the coming years.

Growth of the global jobs market trailed off in 2011, writes the report, adding that many countries were also experiencing “a worsening in job quality.”